U.S. EMV adoption celebrated at SCA

Payment professionals from around the globe convened in Salt Lake City for the 8th annual Smart Card Alliance Payments Summit, held Feb. 3 to 5, 2015. EMV (Europay, MasterCard and Visa) migration topped the conference agenda, which featured keynote addresses from card brands Visa Inc., MasterCard Worldwide, American Express Co. and Discover Financial Services. U.S. issuers have already released 120 million chip cards, according to EMV Migration Forum estimates.

In her keynote address, Kimberly Lawrence, Senior Vice President of Global Corporate Initiatives at Visa, predicted that up to 575 million EMV cards will be issued by the end of 2015, and that 71 percent of credit cards, 41 percent of debit cards, and 47 percent of credit card readers will be EMV enabled. Lawrence noted that 78,800 merchant locations have already implemented EMV technology.

MasterCard emphasizes tokenization

"We really are on the road to EMV everywhere," was the takeaway from MasterCard’s James Anderson, during his keynote address. Anderson, who is the company’s Group Head and Senior Vice President for Mobile and Emerging Payments, based his statement on the U.S. EMV migration that is already underway and expected to gain speed in the coming year.

Anderson cited chip technology as:

• Solving the challenges facing mobile and remote payments as near field communication (NFC), founded on EMV transaction models, is the mobile POS platform for 1.3 billion consumer devices on the iOS and Android operating systems
• Protecting merchants from fraud liability on remote payments with no chip card or NFC device as EMV principles are applied to, for example, the Apple Pay ‘in app’ software

AmEx promotes dual-interface cards

Karen Czack, Vice President of Global Chip Products at AmEx, advocated dual-interface (contact and contactless) EMV chip payment cards for speed and flexibility across retail and transportation channels. Czack has seen widespread adoption of contactless payments in other markets, including the U.K., where contactless accounts for 73 percent of consumer wallet share.

Czack noted that all AmEx card products exist in chip format and are available to card members upon request. Additionally, the AmEx Small Merchant EMV Assistance Program provides a $100 incentive to small and midsize merchants that implement EMV.

Dual-interface cards are especially important in transportation, where a majority of consumers are using contactless cards worldwide. Mass transit adoption of EMV has been a leading topic over the years at the Smart Card Alliance Summit, which has included separate mobile payments and transportation tracks.

When he presented at the 2014 summit, Michael Dinning, U.S. Department of Transportation at Volpe National Transportation Systems Center, said consumers “spend more on transportation than they do on food,” and stressed the "need for collaboration across industries to get to the same place at the same time."

Discover sees value in chip and PIN

Troy Bernard, Discover’s Director and Global Head of Advanced Payments, focused on how emerging payment technologies are improving risk management. During his presentation, Bernard disclosed that Discover is enabling solutions across multiple commerce channels and issuing EMV chip cards with additional rollouts planned throughout the year.

Discover’s ongoing commitment to technology innovation is reflected in its “central platform where partners can go for emerging payments solutions.” Discover promotes chip and PIN as best practice and plans to incent and reward its use among brick-and-mortar retailers.

Tokenization, encryption are front and center

Randy Vanderhoof, Executive Director of the SCA, suggested 2015 might be the year when “tokenization really takes off,” which he called a positive development for the payments industry.

A subgroup of The Mobile Payments Industry Work Group is developing a white paper on the emerging tokenization landscape. The report, due out in April or May of 2015, will feature interviews with mobile, payments and merchant industry stakeholders.

Committee member Dave Lott of the Federal Reserve Bank of Atlanta noted many differing views among those interviewed on approaches to standardized tokenization in the consumer marketplace. Lott acknowledged that most merchants would prefer to implement EMV all at once rather than phasing in new technologies over time.

However, most payment specialists interviewed suggested that existing payments schemes, coupled with the dynamic nature of emerging technologies, will continue to affect EMV migration while complicating efforts to achieve a universal standard of end-to-end encryption and tokenization.

Carolyn Balfany, Senior Vice President and Group Head at MasterCard noted consumer demand is growing for chip cards, with 63 percent of consumers wanting chip cards immediately and 87 percent willing to transition to EMV in the near term.

Editorial Note:

Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.

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